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Goldman Invests $450m In Facebook
An anonymous reader writes "The news that Goldman has taken a stake in Facebook, the white-hot social networking giant, has tongues wagging from Wall Street to Silicon Valley. As first reported by DealBook, Goldman has invested $450 million in a deal that values Facebook at $50 billion. As part of the deal, Goldman is looking to raise as much as $1.5 billion from its wealthy clients to invest in Facebook alongside the firm."
Did evil just become even more evil while I was sleeping over New Years ?
Goldman Sachs aren't exactly known for their "good values".
Why the hell does an investment bank, who normally act as a "service provider" want to take a direct stake in a Social networking company ?
[ Monday is a terrible way to spend one seventh of your life. ]
Only the American tax-payer is the fool, here. This is a can't-lose wager, for everyone else. You invest and get rich or you invest and get re-imbursed by the American tax-payer next time the government decides to save the speculators by handing them a few trillion.
Remember, the current president and last president decided that speculation should no longer have any risk and backed that up with seven or eight trillion dollars in handouts. Hurrah!
Some very sucessful people crashed the worlds economy, while getting filthy filthy rich at the same time.
One mans poison is another mans profit.
That still hinges on the assumption that targeted marketing is so beneficial that it's worth all these billions of dollars. Maybe it is, maybe I'm wrong - I'm just some guy and I'm arguing with billionaires here, after all - but it looks to me like they're building something of a house of cards that'll come tumbling down if the companies purchasing the ads ever manage to quantitatively assess their impact.
Somehow that does not seem right in any shape way or form. I know at least a handful users that have way more than a couple of accounts (pets, hiders and other stuff.)
Maybe 25 cents/user on a good day but $100?!?
Take all your physical paper junk mail and toss it into MULTIPLE trash bags for about a year. Make an intelligent estimate on paper, printing, and postage costs and multiply by the number of envelopes / catalogs / postcards / phone books. I was easily exceeding $1000/yr a couple years ago.
Realize that my yearly junk mail is a yearly cost for an entire industry, that shows up on the P+L and cash flow statements not the balance sheet. On the other hand you're talking about ownership of a future advertising industry merely being $100 per victim. Frankly, $100 ownership cost per victim is cheap.
Compare to the cost of buying the SuperBowel in order to sell millions per minute TV commercials.
Another fun cost comparison is a realistic estimate of the sum of all local TV stations, at least a hundred million industry wide total to reach a million or so viewers, not so far out of line.
Advertising is big business.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
People seem to leave this part out. They keep screaming about the 'bailouts' and tax payer money being 'wasted'. That money has been, for the most part, repaid, with interest. The 'taxpayers' have been making out like bandits with these 'bailouts' because they've decided they don't want the regulation that comes along with it. You take taxpayers money, you play by their rules. It's like people can't beyond the fact that these loans had some pretty heavy strings attached to them for the benefit of the taxpayers.
If you count Goldman's AIG exposure, which any honest accountant must count, Goldman has not even come close to repaying the bailout money they received.
Goldman would absolutely be bankrupt today ten times over had the government not bailed out AIG. The government's bailout of AIG was in effect a proxy bailout of Goldman. Until AIG repays every cent they received with interest, Goldman is not off the hook.
It is, however, more than a little upsetting that cheerleaders like you so blindly accept Goldman's offloading of their liabilities onto AIG and then try to say with a straight face that Goldman has repaid their debt to the taxpayer.